The present crisis is a consequence of the fact that exploding business profits found inadequate investment opportunities in the productive sector and turned instead to financial speculation. Deregulation created "law-free" spaces" with the abrogation of all political controls.

“…what is proposed is not the nationalization of private corporations but rather a corporate takeover of government. The marriage of highly concentrated corporate power with an authoritarian state that serves the politico-economic elite at the expense of the people is more accurately referred to as `financial fascism.’” Robert Scherr in The Nation

As everybody knows, crises are part of capitalism. Now and then these crises can be massive like the present crisis. Their frequency seems to accelerate. Over fifty years passed from the great depression in the 1870s to the first worldwide economic crisis of the 1920s. The ensuring Fordism lasted only five short decades, to the middle of the 1970s. The establishment of neoliberal finance capitalism described as globalization or post-Fordism followed the crisis of Fordism. Over thirty years later, the global economic and political relations of power are now shifting again. Identifying the capitalism now facing us is obviously not easy with these rapid changes. There is no agreement on naming its form that is coming to an end or whether it is an independent phase or an extension of the Fordism crisis. The term “post-Fordism” was a helpful description.

Neoliberal finance capitalism is a particular historical formation of capitalism with a specific crisis dynamic. Therefore the current crisis is essentially different from the crisis of Fordism or the crisis of the 1930s even though parallels are often drawn now. While the Fordism crisis was based on declining capital profits owing to decreasing rationalization possibilities and more favorable power relations for wage-earners, the present crisis is a consequence of the fact that exploding business profits found inadequate investment opportunities in the productive sector given a structurally limited consumer demand and turned instead to financial speculation. Thus a specific case of the capitalist over-accumulation crisis occurs. After this speculation bubble burst, post-Fordism also belongs to the past. Thus the manner and way that the crisis of Fordism was overcome laid the groundwork for global capitalism facing its collapse today.

Current explanations for the economic disaster blame irresponsible and greedy speculators who appear everywhere in the system of so-called turbo-capitalism and not only in the mammoth financial corporations. CEOs like Ackermann of Deutsche Bank believed 25% capital profits could be gained in the long run without anything going wrong. That the debt bubble exploited by these financial jugglers for their own objectives was a systematic element of neoliberal capitalism is concealed in the public discussion. Speculating about the consequences of the financial crisis for the so-called “real economy” (a revealing term) is hypocritical. Steinbruch, Glos, Weber and their accompanying professorial choir must know the financial bubble was the foundation of the “real economy” and not an avoidable malformation.

The deregulation of the capital- and financial markets pushed through at the end of the 1980s created the “law-free” spaces with the abrogation of all political controls. Speculators could exploit these “law-free” areas for their criminal actions. What is termed globalization was nothing but a strategy that aimed at a fundamental shift of the social hierarchy of power in favor of capital and led to a drastic change in income distribution, the impoverishment of large sectors of the population and an enormous social precariousness. Globalization was consciously pushed through by the governments of the domineering states in cooperation with international capital in the wake of the Fordism crisis. That managers now stand as scapegoats and politicians as rescuers blurs the responsibilities. Business profits virtually exploded because of this specific kind of “globalization.” With increasingly unequal income distribution, their realization was only possible because a kind of global Keynesianism was established.

The growing private and state indebtedness – above all in the US – ensured the necessary demand and was the basis of an economic “upswing” that was built on sand from the start. That this system had to collapse some time or other was clear to everyone with a certain economic expertise – which was obviously not true for the conventional economic wise men. Only the moment when the collapse would occur was not clear. Until then the circle of indebtedness would simply drive on and on. This was called turbo-capitalism. This is now at an end.

The connection of crisis and war is interesting. Overcoming the great depression (in the 19th century) occurred with the arms race. The rise of the two superpowers, the US and the Soviet Union, led to the power-political constellation that first made Fordism possible. The defeat of the US in the Vietnam War contributed to the collapse of the Fordist Bretton Woods system of fixed exchange rates and controls on capital transactions and thus to its crisis. The debacle in Iraq and Afghanistan that was the fault of the US points to a similar connection. In any case, the international debt economy was strongly supported.

Three billion dollars of direct war costs must be financed somehow every week. In the course of history, capitalist formations were allied with the hegemony of states that pushed through and guaranteed international rules and institutions – obviously for their own advantage. These were Great Britain in the 19th and the US in the 20th century. The international economy was lent a certain stability for some time. The crisis of Fordism put in question the economic hegemony of the US. The US reacted with the globalization strategy introduced through “Reaganomics” and establishment of neoliberal finance capitalism. This served the goal of restoring the economic, political and military hegemony of the US after the collapse of the Soviet Union. Now this hegemony is over. The present crisis could be the beginning of the end to an “American” century that began with Roosevelt’s New Deal in the 1930s. The whole world was reordered.

State-capitalist countries like China seem less affected b y the crisis even if they cannot withdraw from the suction of the threatening global recession in the long run. They have never renounced on politically controlling their capital- and financial markets. “State bonds,” branded a dangerous evil in the past, are suddenly welcome as rescuers. Scherr’s emphasis on a “financial fascism” is certainly an exaggeration. While there is some truth there, the consequences of the financial crisis are not clear.

The collapse of debt-based neoliberal capitalism will lead to a long-lasting global economic depression as long as the existing hierarchy of power is not changed. This is certain. There are no signs of that change. Present-day bailout actions aim at maintaining this pecking order. Alternatives are not in sight. Rather the establishment of a state-capitalist system is manifest in past dominant capitalist countries which is marked by a close fusion between capital and the state in the wake of the crisis. One can speculate whether the (partial) nationalization of the banks represents the takeover of the banks by the state or the opposite.

A kind of fusion of big capital and the state is occurring. Drawing hope for that for a stronger political control of the economy is misguided in that politics for a long time in nearly all domineering states practically guaranteed capital’s profits by absorbing immense social and ecological costs. If the bailout actions succeed and the banks are revitalized, the re-privatization of security will be queued up. That the bailout of bankrupt businesses and the revitalization of financial speculators will saddle taxpayers shows where the journey is going. The credit bubble will become greater and capital destruction compensated by increased state debts. Thus the fundamental economic instability remains even if a temporary calming occurs.

To master the crisis, the “re-regulation” of the economy is now on the political agenda. The state monopoly capitalism, the close connection of state and capital for the purpose of securing profits, will be extended with more solid institutional structures. German fascism, the reaction to the crisis of the 1930s, could be a kind of model. This process will not require the removal of democratic conditions. Rather the process can be advanced in the scope of liberal-democratic structures that have long decayed to formality. This is what Scheer means by “financial fascism.”

Capitalism actually faces a maximum credible accident. Its consequences as to political conditions could be more than disastrous. This recalls the worldwide economic crisis of the 1930s. The crisis is now used to persuade people to tighten their belts even more in the future. The existing economic and social system should be abolished instead of being only repaired as a stopgap. The alternative to neoliberalism is not a “moral” and “responsible” capitalism. That is a contradiction in itself.